Australia: Public call for submissions on amendments to Western Australian security of payment legislation

Last Updated: 19 October 2014
Article by Thomas Ambrose and Jacqui Doyle

Most Read Contributor in Australia, September 2016

Following the announcement by the Western Australian Building Commission that a review into the operation and effectiveness of the Construction Contracts Act 2004 (WA) would be undertaken this year (the Review), a discussion paper has been released setting out the Terms of Reference of the Review.

The Review will be undertaken by Professor Phil Evans a professor of law at Curtin University who is also a registered adjudicator under the Act and a former civil and structural engineer.

The release of the discussion paper coincides with a public call for submissions from interested members of the building and construction industry. The key issues for which the Review seeks comment are set out in the table below.

No. Issue Question(s) for comment
1. Time limits in which an application can be made Should the Act be amended to extend the time limit in which the adjudication must be brought (or a payment claim can be made) from 28 days to 90 days from which a dispute arises?
2. Timelines for responses

Does the time limit in which the respondent must prepare a written response to the application (14 days) allow a sufficient time for this to be undertaken?

If not, what is an appropriate time?

Would a tiered approach to accommodate different time limits for payment claims of various levels of complexity and/or monetary threshold be more appropriate?

3. Timelines for determinations

Does the time limit in which the appointed adjudicator has to make a determination (14 days) allow sufficient time for this happen?

If not, what is the appropriate time?

Would a tiered approach to accommodate different time limits for payment claims of various levels of complexity and/or monetary threshold be more appropriate?

4. Timelines for extensions

If the time to make a determination remains at 14 days, should the Adjudicator be able to grant an additional 7 days extension of time, without the consent of the parties?

Should the Adjudicator be able to then seek an additional 7 days extension of time with the permission of the parties?

5. Underutilisation of the Act's provisions for Payment Claims

Is the Act a suitable vehicle for resolving small payment claims?

If not, how could the Act could be amended to better facilitate the rapid adjudication of these types of claims?

6. Alternative dispute resolution mechanism for small claims

Should the Building Service (Complaint Resolution and Administration) Act 2011 be amended to extend its provisions to allow the Building Commission to manage an alternative low cost adjudication service for subcontractors seeking payment from principals in relation to construction industry payment claims under $25,000 in value?

If yes, should the adjudication service be fee-for-service, with administration costs partly funded by an increase in the Building Services Levy? Or, are there alternative means of funding this service?

If not, what other alternative means should be explored by Government to address the issue of small claims?

7. Regulation of adjudicators

Are the registration requirements correct?

Should adjudicators be registered for a finite time?

Should Adjudicators complete a post-graduate qualification such as a Graduate Certificate in Building and Construction Law, as a prerequisite?

Is there a need for continuing professional development (CDP)?

The average Adjudicator's fees are about $265 per hour. The fees range from $100 to $400 per hour. Should adjudicator fees be prescribed?

How should adjudicator performance be audited?

8. Exclusion of damages Do you agree that a provision for the exclusion of liquidated damages from progress payments or payment claims is warranted?
9. Inclusion of Domestic Building Contracts Should matters related to the Home Building Contracts Act 1991 be included in the Act?
10. Exclusion of certain mining activities Should the Act apply to the resources sector?
11. Construction of plant for the purposes of extracting or processing Should the Act apply to the construction of plant for the purposes of extracting or processing?
12. Exclusion of artworks Should the Act apply to artworks?
13. National uniformity and harmonisation

In terms of 'harmonisation', should Western Australia consider the Society of Construction Law Australia's proposal for a national approach to security of payment legislation?

In terms of 'harmonisation' should Western Australia consider adopting the Construction Contracts (Security of Payments) Act 2004 (NT)?

Should Western Australia maintain its version of the current 'West Coast model', with minor amendments?

What happens next?

The closing date for submissions on the discussion paper is Friday, 14 November 2014.

After then, the Review is expected to be finalised in the first quarter of next year.

Please contact Troy Lewis and Stephen Burton in our Brisbane Construction and Infrastructure team if you would like more information on the Review or assistance in preparing a submission on any of the questions for comment above.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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